This guest post is by Andy Prescott, CPA CISA.  Andy is a senior manager at Varney & Associates, CPAs LLC. where he specializes in the community banking industry.  Andy also owns artofbeingcheap.com where he writes articles about saving money twice a week.

Helping my kids start a lawn mowing business

As a father of two boys, ages 8 and 10, I want to do everything I can to make sure my kids are prepared for the future.  I try to teach them the right way to treat people, I encourage them to do well in school, and I try to save a little for their college.  As they have gotten a little bit older I have started thinking about them becoming adults and what I can do to make sure they will turn out OK. There are too many young adults who have caused serious damage to their financial well being because of their lack of understanding about how money works. So I’ve decided to make it my mission to go about teaching my kids about money through an entrepreneurial pursuit.

To do this I am helping them start a lawn mowing business.  It is a process that is going to take some time, but the more I think about it, the more I like the idea.  By running their own business, my boys should earn a nice little amount of money that they can learn to manage.  If things go the way I plan, however, what they learn from the process will be more valuable than whatever money they can stuff into their piggy banks.

Dealing with customers

In my career I have seen that most people right out of college (including myself at one point in time) are intimidated by the idea of talking directly to customers.  This is unfortunate because having a good working relationship with your patrons is essential in the business world.  Knowing how to connect well with customers so there is no confusion over things like what work they want done, how they want it done, and when they want it done are crucial to running a good enterprise. Knowing how the customer feels about the work they are doing is also an important lesson.

Connecting with clients in this manner is critical to ensure you know when things have gone wrong and recovery is needed.  Customers are also more likely to give you a second chance after things have gone wrong if they have a strong personal connection to you.

The fact that my kids are running their own lawn mowing business means that they will be forced to deal with customers on every job they do and therefore learning to be comfortable when talking to people in positions of authority, instead of being intimidated as myself and so many of my coworkers were early in our careers.

Doing high quality work

I hope that my kids learn how important it is to do high quality work.  I believe that doing a great job is the best way to grow a business and accrue wealth.  Doing a job the right way is what keeps customers coming back to you, and it is much cheaper and easier to keep a customer you already have than it is to find a new customer.  There is also no better advertising to acquire new customers than a referral from a current client telling all of their friends what a great job you did!

To teach my kids how important it is to do high quality work, I am having them spend this year mowing my lawn before they get any paying customers.  I am mowing the lawn with them and teaching them how to do it right.  Although I am as supportive as possible, I also let them know when the work they have done isn’t good enough.  They get mad at me when they have to mow an area they have already mowed a second time, but learning how important it is to do things the right way is sometimes more important than the occasional hurt feeling.

I have also told them that they aren’t allowed to start their business until they have learned to do the job right all by themselves.  They are anxious to start earning money so they can start buying their own Pokémon cards. That’s a lot of incentive to learn!

The importance of hard work

There is no better teacher than instant gratification. By mowing lawns for money they will learn that when you own your own business, the amount of money you earn is determined by how hard you work. There will be times when there are other things they would rather be doing. There are also times when they would rather just do nothing at all. I hope that this lawn mowing venture will teach them how to balance their time well and that hard work is the only consistent path to success.

Dealing with money   

Finally, I hope that my little dudes learn how to manage the money they earn well.  Financial literacy is a difficult subject to teach children but it is critical to success as an adult.  When my kids land their first paying gig and get their hands on money for the first time I want them to understand how hard they worked to get it. Then I can begin teaching them how to properly treat that money.

I am sure that the first thing they will do is buy Pokémon cards! But after that there should (hopefully) still be quite a bit left over.  That is the point where I can teach them about the importance of saving.  I will talk to them about putting money away for the future and about the power of earning interest.

If they save well  they should have a nice little bundle saved up when they reach college. That will allow them to graduate with less debt.  Not having the burden of student loan debt will make their lives as young adults much easier. Hopefully as I teach them money principles they will also learn enough to know when they should then start saving for retirement, even though that is pretty far down the road.

Preparing my kids for life

If my kid’s lawn mowing business works out, they will earn a good amount of money.  Perhaps even more valuable though are the things they will learn.  The lessons from starting a business about dealing with customers, doing your best work, working hard, and how to handle money are lessons that will stick with them for life.  So this is actually a lot more than a lawn mowing business when you think about it.  It’s a chance to teach my kids how to succeed in life.  And that’s pretty cool.

Do you have any good tips for teaching your kids about money?